Analyst not optimistic about German index

by Alistair Strang from Trends and Targets |

With global indices battered, our chartist looks at the warning signs from Frankfurt.

The DAX updated (DBI:DAX) 

A look at Germany from a big picture perspective appears justified as something is happening apparently.

It appears weakness now below 11,930 point should generate traffic downward to an initial 11,786 points.

While not a particularly impressive ambition, there's some quite dangerous potentials if 11,786 breaks.

Such a scenario allows travel down to 11,321 points.

While the visuals indicate some sort of bounce is probable at such a level, we suspect it will prove short lived as realistically the index will be trading in a region where a longer-term bottom is at 10,192 points.

This will break the uptrend since 2011, leaving the market open to some quite extreme behaviour if market conditions get really negative.

The blue downtrend appears to be presenting a sacred line the market is afraid to cross.

At present, the DAX needs above 12,475 to exceed this trend, launching into a region where 13,650 calculates as possible.

For now, we lack optimism.

Source: Trends and Targets      Past performance is not a guide to future performance

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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